26 April 2011

Higher Education Bubble

Think Progress | Matt Yglesias | Higher Education Fact Of The Day

Malcom Harris in n+1:
If current trends continue, the Department of Education estimates that by 2014 there will be more administrators than instructors at American four-year nonprofit colleges.
Folly. Madness. Lunacy.

I trust I do not need to say why.

(BTW: K-12 schools have this problem as well, and it is just as foolish there.

According to Wikipedia, Chicago Public Schools has 43k employees, 21k of whom are teachers.  Montgomery County Public Schools, where I live, has 22k employees, 11.5k of whom are teachers.

I don't remember the numbers exactly from a story I was told a couple years ago, but I have the magnitudes roughly correct. Chicago public schools had about five times as many students as Chicago parochial schools. The public school have about ten thousand administrative staffers in their HQ while the parochial schools have three. Not three thousand. Three.  Parochial school outcomes are almost certainly no worse than public school outcomes, and depending on who you ask, they are much better.)
I don’t agree with the entirety of the analysis, which I think makes too much out of the details of student loan financing and does too much bending over backwards to avoid offending the sensibilities of college professors and wannabe professors, but this is dead on:
These expensive projects are all part of another cycle: corporate universities must be competitive in recruiting students who may become rich alumni, so they have to spend on attractive extras, which means they need more revenue, so they need more students paying higher tuition. For-profits aren’t the only ones consumed with selling product.
A thousand times Amen. There is not meaningful difference between a non-profit and for-profit school. Here's an anecdote from Phil Miller I've shared before:
Being non-profit does not mean that you don't have profits as an objective. All it does is restrict what you can do with earned profits, meaning that they can't be dispersed to shareholders. As I was told at a meeting when I jokingly brought up the fact that my university is a non-profit, I was told by an older gentleman at my table "Oh, we get plenty of profits. We just make sure we spend it all."
I think this opens the door for a university (even a "non-profit" one) to position itself as "the high-value university." Lower price tag, fewer amenities (which most students don't make use of anyway), a curriculum focused on teaching productivity-enhancing skills (e.g. distribution requirements which make students take basics of accounting and intro to IT rather than Rocks-for-Jocks or Jazz Appreciation), and a focus accepting applicants who are academically talented and competent rather than the other non-academic skills and experience than most "top" schools value.


  1. The public school have about ten thousand administrative staffers in their HQ while the parochial schools have three.

    That seems low.

    Or maybe I'm used to the administrator bloat. My wife taught at a private school for a few years. Three hundred kids, one principal, one secretary, 16 teachers. Janitorial duties were handled by parents working off tuition debt.

  2. It wouldn't surprise me if it was more than 10,000, but that matched up with my rough memory and I thought it was a reasonable guess that half of the ~20,000 non-teachers employees would be at headquarters rather than in schools.

  3. I'd expect that a sizable chunk of the difference between the administrative overhead of parochial vs. public schools lies in the ability of parochial schools to offload a lot of those tasks onto the churches to which they are attached. Not to say that there isn't a meaningful difference (I'm sure there is), but there are probably at least a few person-jobs per school shifted to church staff that then don't show up on school payroll.

  4. You're probably right, to an extent. My grandmother worked for both a Methodist church and the pre-school it ran (not concurrently) and there was some bleed over between those organizations when it came to who was actually getting her hours.

    That's why I found it so memorably that there was a thousand fold difference between the public and Catholic school systems. If the public schools had twice as many, three times as many, even ten times as many administrators, I would have found it telling but not absurd.

    Staffing at Catholic parishes are pretty lean as well. No way they're hiding a few thousand extra FTE employees to put the parochial and public administrator head counts in the same ballpark.

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